how to calculate national income from income method ?
The formula for calculating National Income (NNPFC) using income method is as follows.
NNPFC = Compensation of employees + Operating surplus + Mixed income of self-employed + Net factor income from abroad
Here, compensation of employees comprises of the following items.
- Wages and salaries
- Compensation paid in kind
- Employer's contribution to social security schemes
Operating surplus comprises of the following items.
- Rent
- Interest
- Royalty
- Profit